Kenya’s Economic Crisis: A Nation on the Brink of Collapse
From affluent executives in Karen to boda-boda riders in Mukuru kwa Njenga, Kenya’s economic crisis spares no one. The country’s financial system shows alarming signs of distress, with nonperforming loans (NPLs) exceeding KES 1 trillion as of Q1 2025, according to Central Bank of Kenya (CBK) data.
The Financial Sector in Crisis
The CBK reports that 15% of total credit faces default risk, forcing banks to tighten lending. This credit crunch stems not from borrower recklessness but from a collapsing economy where businesses fail and unemployment soars.
Government Debt and Pending Bills
National and county governments owe private sector players over KES 1 trillion in unpaid bills, creating a vicious cycle of economic stagnation. As banks shift focus to government securities (increasing from 19% to 30% of assets between 2020-2024), SMEs face unprecedented credit access challenges.
Social Consequences of Economic Collapse
The economic downturn has triggered alarming social consequences:
- 27% increase in reported crimes (2023-2024)
- 42% rise in Gender-Based Violence cases (2022-2024)
- 35% increase in asset auctions (2022-2024)
Mobile Loan Crisis
Mobile lending has surpassed KES 1 trillion, with desperate Kenyans borrowing for basic needs at 20-40% monthly interest rates. Over 4 million Kenyans now face credit blacklisting.
Political Implications
An April 2025 TIFA poll shows 91% of Kenyans want President Ruto removed from office. The government’s response has included increased repression rather than reform.
Systemic Corruption
The Auditor General’s Office has uncovered over KES 1 trillion in stolen public funds, including COVID-19 relief and agricultural subsidies. These funds, often laundered abroad, could have stimulated economic growth.
Call to Action
The article concludes with an urgent call for accountability, transparency, and institutional reform to prevent Kenya’s complete economic collapse.
Related Reading: Kenyan SMEs Urged To Brace for Impact